HealthSherpa, the largest private company that brokers use to enroll people in Affordable Care Act (ACA) health plans, has announced a new initiative called the “Member Defense Network” aimed at preventing unauthorized Obamacare sign-ups and plan switches.
This initiative, launched on July 16, will eliminate commissions for insurance brokers who are found to be enrolling individuals in health plans without their consent or switching their coverage without authorization.
Federal regulators have received complaints from over 90,000 Obamacare customers in the first quarter of the year regarding unauthorized enrollments or plan changes. These unauthorized actions can disrupt consumers’ access to their preferred healthcare providers, increase their deductibles, or result in unexpected tax liabilities.
For example, Amy Shepherd from Georgia reported that her ACA plan agent has been switched three times without her knowledge, resulting in numerous unsolicited calls from agents attempting to change her plan.
The effectiveness of the Member Defense Network in preventing unauthorized activities remains uncertain. The initiative will use automation to verify whether agents have obtained written or recorded consent from consumers, a requirement under federal regulations that agents claim is seldom enforced.
If consent is found to be invalid or fabricated, brokers will lose their commissions while investigations are conducted, according to HealthSherpa CEO George Kalogeropoulos.
HealthSherpa, one of the private sector web brokers authorized to link directly to healthcare.gov, allows insurers and other web brokers to join the new program. Currently, health insurers such as Ambetter, Molina Healthcare, and Highmark Blue Cross Blue Shield, covering about half of ACA enrollees, are participating in the network, with the possibility of more insurers joining in the future.
Concerns have been raised by smaller brokerages about potential disruptions caused by HealthSherpa’s algorithms mistakenly flagging legitimate transactions. Ronnell Nolan, president of the trade group Health Agents for America, expressed worries that this could negatively impact reputable agents and disrupt the market.
Federal regulators are also working on addressing unauthorized enrollments and plan switches, introducing new security measures such as requiring agents to log in to their ACA enrollment accounts more frequently.
The Centers for Medicare & Medicaid Services (CMS) have acknowledged HealthSherpa’s initiative and stated that it must adhere to security and privacy standards.
Under the Member Defense Network, participating insurers will daily submit data on plan changes and enrollments, which HealthSherpa’s software will analyze for duplicates or suspicious patterns. Most issues will be resolved through automation, but cases of fake consent will be reported to federal and state regulators.
Despite HealthSherpa’s efforts, some industry professionals are skeptical. Arthur Barlow of Compass Insurance Advisors supports the initiative but believes more needs to be done to secure healthcare.gov accounts.
Aaron Arenbart of DigitalBGA suggests that requiring two-factor authentication for brokers logging into private platforms could be a more effective solution to prevent fraud.
Kalogeropoulos notes that not all unauthorized enrollments are due to intentional fraud; some may stem from confusion among agents, particularly those who purchase contact information from lead-generating firms. HealthSherpa’s system aims to determine which agent has the most valid consent, potentially requiring clients to complete an identity-proofing process.
The new system may face challenges, such as unresolved cases causing consumers to remain in new plans during disputes. Additionally, attorney James Napoli points out that the network’s approach of checking consent after enrollments have been processed is reactive. He advocates for proactive measures like two-factor authentication to prevent fraud before it happens.
